PROFILE OF PHARMACEUTICAL INDUSTRY

INTRODUCTION

The first Indian pharmaceutical company Bengal Chemicals andPharmaceutical Works which still exists today as one of 5 government-owneddrug manufacturers appeared in Calcutta in 1930 These five public sectordrug-manufacturing units under the Ministry of Chemicals and Fertilizers areIndian Drugs and Pharmaceutical Limited (IDPL) Hindustan AntibioticsLimited (HAL) Bengal Immunity Limited (BIL) Bengal Chemicals andPharmaceutical Limited (BCPL) and Smith Stanistreet Pharmaceutical Limited(SSPL) In addition there are a number of pharmaceutical manufacturingunits under the control of state governments such as Goa Antibiotics Ltd andKarnataka Antibiotics Ltd For the next 60 years most of the drugs in Indiawere imported by multinationals either in fully-formulated or bulk form Thereare 24000 licensed pharmaceutical companies Of the 465 bulk drugs used inIndia approximately 425 are manufactured here India has more drugmanufacturingfacilities that have been approved by the US Food and DrugAdministration than any country other than the US Indian genericscompanies supply 84 of the AIDS drugs that Doctors without Borders usesto treat 60000 patients in more than 30 countries

The Indian pharmaceutical industry currently tops the chart amongstIndias science-based industries with wide ranging capabilities in the complexfield of drug manufacture and technology A highly organized sector theIndian pharmaceutical industry is estimated to be worth $ 6 billion growing at about 10 percent annually It ranks very high amongst all the third worldcountries in terms of technology quality and the vast range of medicinesthat are manufactured It ranges from simple headache pills to sophisticatedantibiotics and complex cardiac compounds almost every type of medicine isnow made in the Indian pharmaceutical industryThe Indian pharmaceutical sector has expanded drastically in the lasttwo decades The Pharmaceutical industry in India is an extremelyfragmented market with severe price competition and government pricecontrol The Pharmaceutical industry in India meets around 90 of thecountrys demand for bulk drugs drug intermediates pharmaceuticalformulations chemicals tablets capsules orals and injectables There areapproximately 300 big and medium scale Pharmaceutical companies andabout 8000 Small scale units which form the core of the pharmaceuticalindustry in IndiaIn future it will be a growth period of the Indian PharmaceuticalIndustry The growth is expected to emerge from three major areas1 Contract research and development services2 Export led business of generics and bulk drugs and3 Growth in specialty therapeutic areas in the domestic market

The growth in the institutional segment is likely to raise the market fordiagnosticsIncreasing industrialization literacy levels and urbanization are likely toincrease the health awareness of the general public Consequently thedemand for preventive medicine in general and immunological like tetanus toxoid triple antigen (DPT) measles vaccine Hepatitis vaccine anti-rabiesvaccine polio vaccine and typhoid vaccine are likely to increaseCompanies are likely to pay greater attention to their human resourcesdevelopment effort in general and management developmental programs inparticularThe present state of armed truce between the trade and the industryis likely to continue in the future But with a difference The industry is likelyto be united more closely than beforeCompanies which have strong research focus and competence onlycan achieve a sustainable growth and performance in the borderless futuremarket place Now the companies are steadily increasing their investment inResearch and DevelopmentCompanies that think strategically are the ones that are likely tosucceed in the future Marginal firms are likely to be marginalized Strategicthinking plays an even greater role in the coming years Unless thepharmaceutical companies in India start preparing for future competition rightnow by upgrading in all areas it could be very difficult to exploit growthopportunities It might become difficult even to survive any longer

The industry will continue to be in consolidation mode and mood Thelast few years have seen a spate of mergers and acquisitions of brands aswell as companies Indian companies continue to be aggressive in pursuingmerger and acquisition strategies to gain access to international markets andto reinforce their position Strategic alliances too will be on the rise particularly in the areas of contract research contract manufacturing andproduct licensingThe top ten pharmaceutical companies in Indian market are listed hereunderCipla ranks first with largest value growth rate of 18 and volumegrowth of 153 with an annual value turnover of ` 2155 crores and at thebottom of the table is Aristo Pharmaceutical with 186 value growth rateand 201 volume growth on an yearly turnover of ` 966 crores The otherpharmaceutical companies which tops in top 10 in Indian Pharmaceuticalmarket are Ranbaxy Glaxo Piramal Zydus Cadilla Sun pharmaceuticalAlkem Mankind Lupin The total scenario in this regard has a positiveimpact on growth of pharmaceutical industry which is explained hereunderwith the help of table as well as graphic presentation

Table 10 and Graph 5 Top 10 Companies Driving Market

ADVANTAGE INDIA

As regards the pharmaceutical marketing in the world India isbecoming one of the front runner destinations because of its second largestpopulation in the world the pace of development of its economy adoption oftechnological advancements economical medical treatment cost and alsoavailability of world renowned physicianrsquos etc Following are the advantagesof Indian Healthcare Scenario

1048729 Competent workforce India possesses a skillful work forcewith high managerial and technical competence1048729 Cost-effective chemical synthesis The track record fordevelopment particularly in the area of improved cost-beneficialchemical synthesis for various drug molecules is excellent

1048729 Legal and Financial Framework India is a democraticcountry with a solid legal framework and strong financialmarkets There is already an established international industryand business community1048729 Information and Technology It has a good network ofworld-class educational institutions and established strengths inInformation Technology1048729 Globalization The country is committed to a free marketeconomy and globalization Above all it has a 70 million middleclass market which is constantly growing

Fig 8 Significant developments across the value chain during thelast decade

started taking place in the Indian pharmaceutical industry as well

ConsolidationAfter many years the international pharmaceutical industry hasdiscovered great opportunities in India The process of consolidation whichhas become a popular phenomenon in the world pharmaceutical industry hasstarted taking place in the Indian pharmaceutical industry as well

India is gaining importance as a manufacturer of pharmaceuticalBetween 1996 and 2006 sales of pharmaceutical were up by 9 per annumand thus expanded much faster than the global pharmaceutical market as awhole Demand in India is growing markedly due to rising population figuresthe increasing number aging population and the development of incomes

Medical TourismThe concept of medical tourism is an age old concept In this digitalera half a million people travel across the globe for health purposes Peoplefrom developed and affluent countries are moving out of their own countriesto other destinations seeking solitude natural and holistic remedies and ecofriendly experiences Medical Tourism is one such new area that is ripe withpotential

1048729 Medical travel When an individual travel across the border andoutside onersquos customary environment to seek healthcare services

1048729 Medical Tourist Upon arrival such an individual is called amedical tourist

1048729 Medical Tourism Traveling to a destination in another country toreceive medical dental and surgical care because the destinationenables better access to care provides higher quality care or offersthe same treatment at a more affordable price

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example some

centers will focus strongly on the heart surgery while others will deal withjoint replacement

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example somecenters will focus strongly on the heart surgery while others will deal with

joint replacement

Medical tourism is actively promoted by the governmentrsquos officialpolicy Indiarsquos National health policy 2002 for example says ldquoTo capitalizeon the comparative cost advantage enjoyed by domestic health facilities inthe secondary and tertiary sector the policy will encourage the supply ofservices to patients of foreign origin on payment The rendering of suchservices on payment in foreign exchange will be treated as lsquodeemed exportsrsquoand will be made eligible for all fiscal incentives extended to export earnings

Best hospitals for medical tourism in India The list is not exhaustivebut illustrative

1) Apollo Hospital Chennai2) Indraprashta Apollo Hospitals New Delhi3) Escorts heart Institute and Research Centre New Delhi4) Max Super Specialty Hospital New Delhi5) Wockhardt Hospital and Kidney Institute Kolkata

Indiarsquos strengths in Medical Tourism

1048729 Indian medical centers provide services that are in fact uncommonelsewhere

1048729 World-class treatment at competitive prices is available

1048729 Availability of skills knowledge and resources

1048729 Indiarsquos quality of care is world class competing with any otherindustrialized country

1048729 Indianism With Ayurveda becoming increasingly popular across theglobe this ancient Indian therapy can be used as a non-surgicaltreatment for various ailments along with the meditation and yogaThis gives the touch of Indianism to the treatment

1048729 The diversity of tourist destinations availability Leisure tourism isalready very much in demand in India as the country offers diversecultural and scenic beauty India has almost all sort of destinationslike high mountains vast deserts scenic beaches historicalmonuments and religious temples etc known for its hospitality fortourists

Medical tourism in India is growing at a rate of 30 percent per per year Itis estimated that India will earn US$ 22 Billion a year through medical tourism by 2012

PENETRATION IN THE WORLD MARKET

Exports

The Domestic pharmaceutical sector has been expanding and has isestimated at US$ 1172 billion (` 55454 crore) in 2008-09 from US$ 688billion (` 32575 crore) in 2003-04 Indian exports are destined to variouscountries around the globe including highly regulated markets of USAEurope Japan and Australia

Export of domestic drugs and pharmaceutical from 2003-04 to 2008-09are given in table below

Table 11 Growth rate of Domestic Indian marketSno Domestic Indian

market(figure in ` crore)

Growth Rate()

2003-04 32575 7282004-05 34128 4772005-06 39989 17172006-07 45369 13452007-08 50946 12302008-09 55454 885

Pharmaceutical Export Promotion Council (Pharmexcil)

The Department had played a pivotal role in the formation ofPharmexcil consequent to the recommendation from 9th Five Year AnnualPlan Working Group Report on Drugs and Pharmaceutical In the light of thisthe Department constantly interacts with Pharmexcil in their work areas Therole of Pharmexcil is for facilitation of exports of Drugs PharmaceuticalBiotechnology products Herbal medicines and Diagnostics to name a few Itis authorized to issue Registration-cum-Membership Certificate (RCMC) whichis one of the requirements for the importers and exporters of commodities Inaddition to this Pharmexcil is concerned with giving export thrust to thevarious products through visits of delegations to various markets abroadorganizing of seminars workshops and exhibitions As a major area of workPharmexcil also holds BuyersSellers meets and compiles detailed data base on pharmaceutical exports and problems in exporting pharmaceutical groupproducts of Pharmaceutical

Top 20 destinations of Indian Pharmaceutical productsduring 2008-09

S No Importing country

2008-09 (figure in` Crore)

1 USA 7103272 Russia 1519203 Germany 1441874 Austria 1417155 UK 1233096 South Africa 1126757 Canada 1090438 Brazil 1018899 Nigeria 10017410 Ukraine 6872211 Israel 6862212 Netherlands 6699813 Spain 6200214 Turkey 6142015 China 5615316 Kenya 5438617 Vietnam 5366218 Belgium 5209019 Italy 578520 Mexico 50154

Source Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

INDUSTRY SCENARIO

The Indian pharmaceutical industry currently tops the chart amongst Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology A highly organized sector the Indian pharmaceuticalindustry is estimated to be worth $ 45 billion growing at about 8 to 9 percent annually It ranks very high amongst all the third world countries in terms of technology quality and the vast range of medicines that are manufactured It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds almost every type of medicine is now made in the Indian pharmaceutical industry The Indian pharmaceutical sector is highly fragmented with more than 20000 registered units It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

The Indian pharmaceutical industry currently tops the chart amongstIndias science-based industries with wide ranging capabilities in the complexfield of drug manufacture and technology A highly organized sector theIndian pharmaceutical industry is estimated to be worth $ 6 billion growing at about 10 percent annually It ranks very high amongst all the third worldcountries in terms of technology quality and the vast range of medicinesthat are manufactured It ranges from simple headache pills to sophisticatedantibiotics and complex cardiac compounds almost every type of medicine isnow made in the Indian pharmaceutical industryThe Indian pharmaceutical sector has expanded drastically in the lasttwo decades The Pharmaceutical industry in India is an extremelyfragmented market with severe price competition and government pricecontrol The Pharmaceutical industry in India meets around 90 of thecountrys demand for bulk drugs drug intermediates pharmaceuticalformulations chemicals tablets capsules orals and injectables There areapproximately 300 big and medium scale Pharmaceutical companies andabout 8000 Small scale units which form the core of the pharmaceuticalindustry in IndiaIn future it will be a growth period of the Indian PharmaceuticalIndustry The growth is expected to emerge from three major areas1 Contract research and development services2 Export led business of generics and bulk drugs and3 Growth in specialty therapeutic areas in the domestic market

The growth in the institutional segment is likely to raise the market fordiagnosticsIncreasing industrialization literacy levels and urbanization are likely toincrease the health awareness of the general public Consequently thedemand for preventive medicine in general and immunological like tetanus toxoid triple antigen (DPT) measles vaccine Hepatitis vaccine anti-rabiesvaccine polio vaccine and typhoid vaccine are likely to increaseCompanies are likely to pay greater attention to their human resourcesdevelopment effort in general and management developmental programs inparticularThe present state of armed truce between the trade and the industryis likely to continue in the future But with a difference The industry is likelyto be united more closely than beforeCompanies which have strong research focus and competence onlycan achieve a sustainable growth and performance in the borderless futuremarket place Now the companies are steadily increasing their investment inResearch and DevelopmentCompanies that think strategically are the ones that are likely tosucceed in the future Marginal firms are likely to be marginalized Strategicthinking plays an even greater role in the coming years Unless thepharmaceutical companies in India start preparing for future competition rightnow by upgrading in all areas it could be very difficult to exploit growthopportunities It might become difficult even to survive any longer

The industry will continue to be in consolidation mode and mood Thelast few years have seen a spate of mergers and acquisitions of brands aswell as companies Indian companies continue to be aggressive in pursuingmerger and acquisition strategies to gain access to international markets andto reinforce their position Strategic alliances too will be on the rise particularly in the areas of contract research contract manufacturing andproduct licensingThe top ten pharmaceutical companies in Indian market are listed hereunderCipla ranks first with largest value growth rate of 18 and volumegrowth of 153 with an annual value turnover of ` 2155 crores and at thebottom of the table is Aristo Pharmaceutical with 186 value growth rateand 201 volume growth on an yearly turnover of ` 966 crores The otherpharmaceutical companies which tops in top 10 in Indian Pharmaceuticalmarket are Ranbaxy Glaxo Piramal Zydus Cadilla Sun pharmaceuticalAlkem Mankind Lupin The total scenario in this regard has a positiveimpact on growth of pharmaceutical industry which is explained hereunderwith the help of table as well as graphic presentation

Table 10 and Graph 5 Top 10 Companies Driving Market

ADVANTAGE INDIA

As regards the pharmaceutical marketing in the world India isbecoming one of the front runner destinations because of its second largestpopulation in the world the pace of development of its economy adoption oftechnological advancements economical medical treatment cost and alsoavailability of world renowned physicianrsquos etc Following are the advantagesof Indian Healthcare Scenario

1048729 Competent workforce India possesses a skillful work forcewith high managerial and technical competence1048729 Cost-effective chemical synthesis The track record fordevelopment particularly in the area of improved cost-beneficialchemical synthesis for various drug molecules is excellent

1048729 Legal and Financial Framework India is a democraticcountry with a solid legal framework and strong financialmarkets There is already an established international industryand business community1048729 Information and Technology It has a good network ofworld-class educational institutions and established strengths inInformation Technology1048729 Globalization The country is committed to a free marketeconomy and globalization Above all it has a 70 million middleclass market which is constantly growing

Fig 8 Significant developments across the value chain during thelast decade

started taking place in the Indian pharmaceutical industry as well

ConsolidationAfter many years the international pharmaceutical industry hasdiscovered great opportunities in India The process of consolidation whichhas become a popular phenomenon in the world pharmaceutical industry hasstarted taking place in the Indian pharmaceutical industry as well

India is gaining importance as a manufacturer of pharmaceuticalBetween 1996 and 2006 sales of pharmaceutical were up by 9 per annumand thus expanded much faster than the global pharmaceutical market as awhole Demand in India is growing markedly due to rising population figuresthe increasing number aging population and the development of incomes

Medical TourismThe concept of medical tourism is an age old concept In this digitalera half a million people travel across the globe for health purposes Peoplefrom developed and affluent countries are moving out of their own countriesto other destinations seeking solitude natural and holistic remedies and ecofriendly experiences Medical Tourism is one such new area that is ripe withpotential

1048729 Medical travel When an individual travel across the border andoutside onersquos customary environment to seek healthcare services

1048729 Medical Tourist Upon arrival such an individual is called amedical tourist

1048729 Medical Tourism Traveling to a destination in another country toreceive medical dental and surgical care because the destinationenables better access to care provides higher quality care or offersthe same treatment at a more affordable price

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example some

centers will focus strongly on the heart surgery while others will deal withjoint replacement

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example somecenters will focus strongly on the heart surgery while others will deal with

joint replacement

Medical tourism is actively promoted by the governmentrsquos officialpolicy Indiarsquos National health policy 2002 for example says ldquoTo capitalizeon the comparative cost advantage enjoyed by domestic health facilities inthe secondary and tertiary sector the policy will encourage the supply ofservices to patients of foreign origin on payment The rendering of suchservices on payment in foreign exchange will be treated as lsquodeemed exportsrsquoand will be made eligible for all fiscal incentives extended to export earnings

Best hospitals for medical tourism in India The list is not exhaustivebut illustrative

1) Apollo Hospital Chennai2) Indraprashta Apollo Hospitals New Delhi3) Escorts heart Institute and Research Centre New Delhi4) Max Super Specialty Hospital New Delhi5) Wockhardt Hospital and Kidney Institute Kolkata

Indiarsquos strengths in Medical Tourism

1048729 Indian medical centers provide services that are in fact uncommonelsewhere

1048729 World-class treatment at competitive prices is available

1048729 Availability of skills knowledge and resources

1048729 Indiarsquos quality of care is world class competing with any otherindustrialized country

1048729 Indianism With Ayurveda becoming increasingly popular across theglobe this ancient Indian therapy can be used as a non-surgicaltreatment for various ailments along with the meditation and yogaThis gives the touch of Indianism to the treatment

1048729 The diversity of tourist destinations availability Leisure tourism isalready very much in demand in India as the country offers diversecultural and scenic beauty India has almost all sort of destinationslike high mountains vast deserts scenic beaches historicalmonuments and religious temples etc known for its hospitality fortourists

Medical tourism in India is growing at a rate of 30 percent per per year Itis estimated that India will earn US$ 22 Billion a year through medical tourism by 2012

PENETRATION IN THE WORLD MARKET

Exports

The Domestic pharmaceutical sector has been expanding and has isestimated at US$ 1172 billion (` 55454 crore) in 2008-09 from US$ 688billion (` 32575 crore) in 2003-04 Indian exports are destined to variouscountries around the globe including highly regulated markets of USAEurope Japan and Australia

Export of domestic drugs and pharmaceutical from 2003-04 to 2008-09are given in table below

Table 11 Growth rate of Domestic Indian marketSno Domestic Indian

market(figure in ` crore)

Growth Rate()

2003-04 32575 7282004-05 34128 4772005-06 39989 17172006-07 45369 13452007-08 50946 12302008-09 55454 885

Pharmaceutical Export Promotion Council (Pharmexcil)

The Department had played a pivotal role in the formation ofPharmexcil consequent to the recommendation from 9th Five Year AnnualPlan Working Group Report on Drugs and Pharmaceutical In the light of thisthe Department constantly interacts with Pharmexcil in their work areas Therole of Pharmexcil is for facilitation of exports of Drugs PharmaceuticalBiotechnology products Herbal medicines and Diagnostics to name a few Itis authorized to issue Registration-cum-Membership Certificate (RCMC) whichis one of the requirements for the importers and exporters of commodities Inaddition to this Pharmexcil is concerned with giving export thrust to thevarious products through visits of delegations to various markets abroadorganizing of seminars workshops and exhibitions As a major area of workPharmexcil also holds BuyersSellers meets and compiles detailed data base on pharmaceutical exports and problems in exporting pharmaceutical groupproducts of Pharmaceutical

Top 20 destinations of Indian Pharmaceutical productsduring 2008-09

S No Importing country

2008-09 (figure in` Crore)

1 USA 7103272 Russia 1519203 Germany 1441874 Austria 1417155 UK 1233096 South Africa 1126757 Canada 1090438 Brazil 1018899 Nigeria 10017410 Ukraine 6872211 Israel 6862212 Netherlands 6699813 Spain 6200214 Turkey 6142015 China 5615316 Kenya 5438617 Vietnam 5366218 Belgium 5209019 Italy 578520 Mexico 50154

Source Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

INDUSTRY SCENARIO

The Indian pharmaceutical industry currently tops the chart amongst Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology A highly organized sector the Indian pharmaceuticalindustry is estimated to be worth $ 45 billion growing at about 8 to 9 percent annually It ranks very high amongst all the third world countries in terms of technology quality and the vast range of medicines that are manufactured It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds almost every type of medicine is now made in the Indian pharmaceutical industry The Indian pharmaceutical sector is highly fragmented with more than 20000 registered units It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

The growth in the institutional segment is likely to raise the market fordiagnosticsIncreasing industrialization literacy levels and urbanization are likely toincrease the health awareness of the general public Consequently thedemand for preventive medicine in general and immunological like tetanus toxoid triple antigen (DPT) measles vaccine Hepatitis vaccine anti-rabiesvaccine polio vaccine and typhoid vaccine are likely to increaseCompanies are likely to pay greater attention to their human resourcesdevelopment effort in general and management developmental programs inparticularThe present state of armed truce between the trade and the industryis likely to continue in the future But with a difference The industry is likelyto be united more closely than beforeCompanies which have strong research focus and competence onlycan achieve a sustainable growth and performance in the borderless futuremarket place Now the companies are steadily increasing their investment inResearch and DevelopmentCompanies that think strategically are the ones that are likely tosucceed in the future Marginal firms are likely to be marginalized Strategicthinking plays an even greater role in the coming years Unless thepharmaceutical companies in India start preparing for future competition rightnow by upgrading in all areas it could be very difficult to exploit growthopportunities It might become difficult even to survive any longer

The industry will continue to be in consolidation mode and mood Thelast few years have seen a spate of mergers and acquisitions of brands aswell as companies Indian companies continue to be aggressive in pursuingmerger and acquisition strategies to gain access to international markets andto reinforce their position Strategic alliances too will be on the rise particularly in the areas of contract research contract manufacturing andproduct licensingThe top ten pharmaceutical companies in Indian market are listed hereunderCipla ranks first with largest value growth rate of 18 and volumegrowth of 153 with an annual value turnover of ` 2155 crores and at thebottom of the table is Aristo Pharmaceutical with 186 value growth rateand 201 volume growth on an yearly turnover of ` 966 crores The otherpharmaceutical companies which tops in top 10 in Indian Pharmaceuticalmarket are Ranbaxy Glaxo Piramal Zydus Cadilla Sun pharmaceuticalAlkem Mankind Lupin The total scenario in this regard has a positiveimpact on growth of pharmaceutical industry which is explained hereunderwith the help of table as well as graphic presentation

Table 10 and Graph 5 Top 10 Companies Driving Market

ADVANTAGE INDIA

As regards the pharmaceutical marketing in the world India isbecoming one of the front runner destinations because of its second largestpopulation in the world the pace of development of its economy adoption oftechnological advancements economical medical treatment cost and alsoavailability of world renowned physicianrsquos etc Following are the advantagesof Indian Healthcare Scenario

1048729 Competent workforce India possesses a skillful work forcewith high managerial and technical competence1048729 Cost-effective chemical synthesis The track record fordevelopment particularly in the area of improved cost-beneficialchemical synthesis for various drug molecules is excellent

1048729 Legal and Financial Framework India is a democraticcountry with a solid legal framework and strong financialmarkets There is already an established international industryand business community1048729 Information and Technology It has a good network ofworld-class educational institutions and established strengths inInformation Technology1048729 Globalization The country is committed to a free marketeconomy and globalization Above all it has a 70 million middleclass market which is constantly growing

Fig 8 Significant developments across the value chain during thelast decade

started taking place in the Indian pharmaceutical industry as well

ConsolidationAfter many years the international pharmaceutical industry hasdiscovered great opportunities in India The process of consolidation whichhas become a popular phenomenon in the world pharmaceutical industry hasstarted taking place in the Indian pharmaceutical industry as well

India is gaining importance as a manufacturer of pharmaceuticalBetween 1996 and 2006 sales of pharmaceutical were up by 9 per annumand thus expanded much faster than the global pharmaceutical market as awhole Demand in India is growing markedly due to rising population figuresthe increasing number aging population and the development of incomes

Medical TourismThe concept of medical tourism is an age old concept In this digitalera half a million people travel across the globe for health purposes Peoplefrom developed and affluent countries are moving out of their own countriesto other destinations seeking solitude natural and holistic remedies and ecofriendly experiences Medical Tourism is one such new area that is ripe withpotential

1048729 Medical travel When an individual travel across the border andoutside onersquos customary environment to seek healthcare services

1048729 Medical Tourist Upon arrival such an individual is called amedical tourist

1048729 Medical Tourism Traveling to a destination in another country toreceive medical dental and surgical care because the destinationenables better access to care provides higher quality care or offersthe same treatment at a more affordable price

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example some

centers will focus strongly on the heart surgery while others will deal withjoint replacement

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example somecenters will focus strongly on the heart surgery while others will deal with

joint replacement

Medical tourism is actively promoted by the governmentrsquos officialpolicy Indiarsquos National health policy 2002 for example says ldquoTo capitalizeon the comparative cost advantage enjoyed by domestic health facilities inthe secondary and tertiary sector the policy will encourage the supply ofservices to patients of foreign origin on payment The rendering of suchservices on payment in foreign exchange will be treated as lsquodeemed exportsrsquoand will be made eligible for all fiscal incentives extended to export earnings

Best hospitals for medical tourism in India The list is not exhaustivebut illustrative

1) Apollo Hospital Chennai2) Indraprashta Apollo Hospitals New Delhi3) Escorts heart Institute and Research Centre New Delhi4) Max Super Specialty Hospital New Delhi5) Wockhardt Hospital and Kidney Institute Kolkata

Indiarsquos strengths in Medical Tourism

1048729 Indian medical centers provide services that are in fact uncommonelsewhere

1048729 World-class treatment at competitive prices is available

1048729 Availability of skills knowledge and resources

1048729 Indiarsquos quality of care is world class competing with any otherindustrialized country

1048729 Indianism With Ayurveda becoming increasingly popular across theglobe this ancient Indian therapy can be used as a non-surgicaltreatment for various ailments along with the meditation and yogaThis gives the touch of Indianism to the treatment

1048729 The diversity of tourist destinations availability Leisure tourism isalready very much in demand in India as the country offers diversecultural and scenic beauty India has almost all sort of destinationslike high mountains vast deserts scenic beaches historicalmonuments and religious temples etc known for its hospitality fortourists

Medical tourism in India is growing at a rate of 30 percent per per year Itis estimated that India will earn US$ 22 Billion a year through medical tourism by 2012

PENETRATION IN THE WORLD MARKET

Exports

The Domestic pharmaceutical sector has been expanding and has isestimated at US$ 1172 billion (` 55454 crore) in 2008-09 from US$ 688billion (` 32575 crore) in 2003-04 Indian exports are destined to variouscountries around the globe including highly regulated markets of USAEurope Japan and Australia

Export of domestic drugs and pharmaceutical from 2003-04 to 2008-09are given in table below

Table 11 Growth rate of Domestic Indian marketSno Domestic Indian

market(figure in ` crore)

Growth Rate()

2003-04 32575 7282004-05 34128 4772005-06 39989 17172006-07 45369 13452007-08 50946 12302008-09 55454 885

Pharmaceutical Export Promotion Council (Pharmexcil)

The Department had played a pivotal role in the formation ofPharmexcil consequent to the recommendation from 9th Five Year AnnualPlan Working Group Report on Drugs and Pharmaceutical In the light of thisthe Department constantly interacts with Pharmexcil in their work areas Therole of Pharmexcil is for facilitation of exports of Drugs PharmaceuticalBiotechnology products Herbal medicines and Diagnostics to name a few Itis authorized to issue Registration-cum-Membership Certificate (RCMC) whichis one of the requirements for the importers and exporters of commodities Inaddition to this Pharmexcil is concerned with giving export thrust to thevarious products through visits of delegations to various markets abroadorganizing of seminars workshops and exhibitions As a major area of workPharmexcil also holds BuyersSellers meets and compiles detailed data base on pharmaceutical exports and problems in exporting pharmaceutical groupproducts of Pharmaceutical

Top 20 destinations of Indian Pharmaceutical productsduring 2008-09

S No Importing country

2008-09 (figure in` Crore)

1 USA 7103272 Russia 1519203 Germany 1441874 Austria 1417155 UK 1233096 South Africa 1126757 Canada 1090438 Brazil 1018899 Nigeria 10017410 Ukraine 6872211 Israel 6862212 Netherlands 6699813 Spain 6200214 Turkey 6142015 China 5615316 Kenya 5438617 Vietnam 5366218 Belgium 5209019 Italy 578520 Mexico 50154

Source Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

INDUSTRY SCENARIO

The Indian pharmaceutical industry currently tops the chart amongst Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology A highly organized sector the Indian pharmaceuticalindustry is estimated to be worth $ 45 billion growing at about 8 to 9 percent annually It ranks very high amongst all the third world countries in terms of technology quality and the vast range of medicines that are manufactured It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds almost every type of medicine is now made in the Indian pharmaceutical industry The Indian pharmaceutical sector is highly fragmented with more than 20000 registered units It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

The industry will continue to be in consolidation mode and mood Thelast few years have seen a spate of mergers and acquisitions of brands aswell as companies Indian companies continue to be aggressive in pursuingmerger and acquisition strategies to gain access to international markets andto reinforce their position Strategic alliances too will be on the rise particularly in the areas of contract research contract manufacturing andproduct licensingThe top ten pharmaceutical companies in Indian market are listed hereunderCipla ranks first with largest value growth rate of 18 and volumegrowth of 153 with an annual value turnover of ` 2155 crores and at thebottom of the table is Aristo Pharmaceutical with 186 value growth rateand 201 volume growth on an yearly turnover of ` 966 crores The otherpharmaceutical companies which tops in top 10 in Indian Pharmaceuticalmarket are Ranbaxy Glaxo Piramal Zydus Cadilla Sun pharmaceuticalAlkem Mankind Lupin The total scenario in this regard has a positiveimpact on growth of pharmaceutical industry which is explained hereunderwith the help of table as well as graphic presentation

Table 10 and Graph 5 Top 10 Companies Driving Market

ADVANTAGE INDIA

As regards the pharmaceutical marketing in the world India isbecoming one of the front runner destinations because of its second largestpopulation in the world the pace of development of its economy adoption oftechnological advancements economical medical treatment cost and alsoavailability of world renowned physicianrsquos etc Following are the advantagesof Indian Healthcare Scenario

1048729 Competent workforce India possesses a skillful work forcewith high managerial and technical competence1048729 Cost-effective chemical synthesis The track record fordevelopment particularly in the area of improved cost-beneficialchemical synthesis for various drug molecules is excellent

1048729 Legal and Financial Framework India is a democraticcountry with a solid legal framework and strong financialmarkets There is already an established international industryand business community1048729 Information and Technology It has a good network ofworld-class educational institutions and established strengths inInformation Technology1048729 Globalization The country is committed to a free marketeconomy and globalization Above all it has a 70 million middleclass market which is constantly growing

Fig 8 Significant developments across the value chain during thelast decade

started taking place in the Indian pharmaceutical industry as well

ConsolidationAfter many years the international pharmaceutical industry hasdiscovered great opportunities in India The process of consolidation whichhas become a popular phenomenon in the world pharmaceutical industry hasstarted taking place in the Indian pharmaceutical industry as well

India is gaining importance as a manufacturer of pharmaceuticalBetween 1996 and 2006 sales of pharmaceutical were up by 9 per annumand thus expanded much faster than the global pharmaceutical market as awhole Demand in India is growing markedly due to rising population figuresthe increasing number aging population and the development of incomes

Medical TourismThe concept of medical tourism is an age old concept In this digitalera half a million people travel across the globe for health purposes Peoplefrom developed and affluent countries are moving out of their own countriesto other destinations seeking solitude natural and holistic remedies and ecofriendly experiences Medical Tourism is one such new area that is ripe withpotential

1048729 Medical travel When an individual travel across the border andoutside onersquos customary environment to seek healthcare services

1048729 Medical Tourist Upon arrival such an individual is called amedical tourist

1048729 Medical Tourism Traveling to a destination in another country toreceive medical dental and surgical care because the destinationenables better access to care provides higher quality care or offersthe same treatment at a more affordable price

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example some

centers will focus strongly on the heart surgery while others will deal withjoint replacement

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example somecenters will focus strongly on the heart surgery while others will deal with

joint replacement

Medical tourism is actively promoted by the governmentrsquos officialpolicy Indiarsquos National health policy 2002 for example says ldquoTo capitalizeon the comparative cost advantage enjoyed by domestic health facilities inthe secondary and tertiary sector the policy will encourage the supply ofservices to patients of foreign origin on payment The rendering of suchservices on payment in foreign exchange will be treated as lsquodeemed exportsrsquoand will be made eligible for all fiscal incentives extended to export earnings

Best hospitals for medical tourism in India The list is not exhaustivebut illustrative

1) Apollo Hospital Chennai2) Indraprashta Apollo Hospitals New Delhi3) Escorts heart Institute and Research Centre New Delhi4) Max Super Specialty Hospital New Delhi5) Wockhardt Hospital and Kidney Institute Kolkata

Indiarsquos strengths in Medical Tourism

1048729 Indian medical centers provide services that are in fact uncommonelsewhere

1048729 World-class treatment at competitive prices is available

1048729 Availability of skills knowledge and resources

1048729 Indiarsquos quality of care is world class competing with any otherindustrialized country

1048729 Indianism With Ayurveda becoming increasingly popular across theglobe this ancient Indian therapy can be used as a non-surgicaltreatment for various ailments along with the meditation and yogaThis gives the touch of Indianism to the treatment

1048729 The diversity of tourist destinations availability Leisure tourism isalready very much in demand in India as the country offers diversecultural and scenic beauty India has almost all sort of destinationslike high mountains vast deserts scenic beaches historicalmonuments and religious temples etc known for its hospitality fortourists

Medical tourism in India is growing at a rate of 30 percent per per year Itis estimated that India will earn US$ 22 Billion a year through medical tourism by 2012

PENETRATION IN THE WORLD MARKET

Exports

The Domestic pharmaceutical sector has been expanding and has isestimated at US$ 1172 billion (` 55454 crore) in 2008-09 from US$ 688billion (` 32575 crore) in 2003-04 Indian exports are destined to variouscountries around the globe including highly regulated markets of USAEurope Japan and Australia

Export of domestic drugs and pharmaceutical from 2003-04 to 2008-09are given in table below

Table 11 Growth rate of Domestic Indian marketSno Domestic Indian

market(figure in ` crore)

Growth Rate()

2003-04 32575 7282004-05 34128 4772005-06 39989 17172006-07 45369 13452007-08 50946 12302008-09 55454 885

Pharmaceutical Export Promotion Council (Pharmexcil)

The Department had played a pivotal role in the formation ofPharmexcil consequent to the recommendation from 9th Five Year AnnualPlan Working Group Report on Drugs and Pharmaceutical In the light of thisthe Department constantly interacts with Pharmexcil in their work areas Therole of Pharmexcil is for facilitation of exports of Drugs PharmaceuticalBiotechnology products Herbal medicines and Diagnostics to name a few Itis authorized to issue Registration-cum-Membership Certificate (RCMC) whichis one of the requirements for the importers and exporters of commodities Inaddition to this Pharmexcil is concerned with giving export thrust to thevarious products through visits of delegations to various markets abroadorganizing of seminars workshops and exhibitions As a major area of workPharmexcil also holds BuyersSellers meets and compiles detailed data base on pharmaceutical exports and problems in exporting pharmaceutical groupproducts of Pharmaceutical

Top 20 destinations of Indian Pharmaceutical productsduring 2008-09

S No Importing country

2008-09 (figure in` Crore)

1 USA 7103272 Russia 1519203 Germany 1441874 Austria 1417155 UK 1233096 South Africa 1126757 Canada 1090438 Brazil 1018899 Nigeria 10017410 Ukraine 6872211 Israel 6862212 Netherlands 6699813 Spain 6200214 Turkey 6142015 China 5615316 Kenya 5438617 Vietnam 5366218 Belgium 5209019 Italy 578520 Mexico 50154

Source Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

INDUSTRY SCENARIO

The Indian pharmaceutical industry currently tops the chart amongst Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology A highly organized sector the Indian pharmaceuticalindustry is estimated to be worth $ 45 billion growing at about 8 to 9 percent annually It ranks very high amongst all the third world countries in terms of technology quality and the vast range of medicines that are manufactured It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds almost every type of medicine is now made in the Indian pharmaceutical industry The Indian pharmaceutical sector is highly fragmented with more than 20000 registered units It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

ADVANTAGE INDIA

As regards the pharmaceutical marketing in the world India isbecoming one of the front runner destinations because of its second largestpopulation in the world the pace of development of its economy adoption oftechnological advancements economical medical treatment cost and alsoavailability of world renowned physicianrsquos etc Following are the advantagesof Indian Healthcare Scenario

1048729 Competent workforce India possesses a skillful work forcewith high managerial and technical competence1048729 Cost-effective chemical synthesis The track record fordevelopment particularly in the area of improved cost-beneficialchemical synthesis for various drug molecules is excellent

1048729 Legal and Financial Framework India is a democraticcountry with a solid legal framework and strong financialmarkets There is already an established international industryand business community1048729 Information and Technology It has a good network ofworld-class educational institutions and established strengths inInformation Technology1048729 Globalization The country is committed to a free marketeconomy and globalization Above all it has a 70 million middleclass market which is constantly growing

Fig 8 Significant developments across the value chain during thelast decade

started taking place in the Indian pharmaceutical industry as well

ConsolidationAfter many years the international pharmaceutical industry hasdiscovered great opportunities in India The process of consolidation whichhas become a popular phenomenon in the world pharmaceutical industry hasstarted taking place in the Indian pharmaceutical industry as well

India is gaining importance as a manufacturer of pharmaceuticalBetween 1996 and 2006 sales of pharmaceutical were up by 9 per annumand thus expanded much faster than the global pharmaceutical market as awhole Demand in India is growing markedly due to rising population figuresthe increasing number aging population and the development of incomes

Medical TourismThe concept of medical tourism is an age old concept In this digitalera half a million people travel across the globe for health purposes Peoplefrom developed and affluent countries are moving out of their own countriesto other destinations seeking solitude natural and holistic remedies and ecofriendly experiences Medical Tourism is one such new area that is ripe withpotential

1048729 Medical travel When an individual travel across the border andoutside onersquos customary environment to seek healthcare services

1048729 Medical Tourist Upon arrival such an individual is called amedical tourist

1048729 Medical Tourism Traveling to a destination in another country toreceive medical dental and surgical care because the destinationenables better access to care provides higher quality care or offersthe same treatment at a more affordable price

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example some

centers will focus strongly on the heart surgery while others will deal withjoint replacement

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example somecenters will focus strongly on the heart surgery while others will deal with

joint replacement

Medical tourism is actively promoted by the governmentrsquos officialpolicy Indiarsquos National health policy 2002 for example says ldquoTo capitalizeon the comparative cost advantage enjoyed by domestic health facilities inthe secondary and tertiary sector the policy will encourage the supply ofservices to patients of foreign origin on payment The rendering of suchservices on payment in foreign exchange will be treated as lsquodeemed exportsrsquoand will be made eligible for all fiscal incentives extended to export earnings

Best hospitals for medical tourism in India The list is not exhaustivebut illustrative

1) Apollo Hospital Chennai2) Indraprashta Apollo Hospitals New Delhi3) Escorts heart Institute and Research Centre New Delhi4) Max Super Specialty Hospital New Delhi5) Wockhardt Hospital and Kidney Institute Kolkata

Indiarsquos strengths in Medical Tourism

1048729 Indian medical centers provide services that are in fact uncommonelsewhere

1048729 World-class treatment at competitive prices is available

1048729 Availability of skills knowledge and resources

1048729 Indiarsquos quality of care is world class competing with any otherindustrialized country

1048729 Indianism With Ayurveda becoming increasingly popular across theglobe this ancient Indian therapy can be used as a non-surgicaltreatment for various ailments along with the meditation and yogaThis gives the touch of Indianism to the treatment

1048729 The diversity of tourist destinations availability Leisure tourism isalready very much in demand in India as the country offers diversecultural and scenic beauty India has almost all sort of destinationslike high mountains vast deserts scenic beaches historicalmonuments and religious temples etc known for its hospitality fortourists

Medical tourism in India is growing at a rate of 30 percent per per year Itis estimated that India will earn US$ 22 Billion a year through medical tourism by 2012

PENETRATION IN THE WORLD MARKET

Exports

The Domestic pharmaceutical sector has been expanding and has isestimated at US$ 1172 billion (` 55454 crore) in 2008-09 from US$ 688billion (` 32575 crore) in 2003-04 Indian exports are destined to variouscountries around the globe including highly regulated markets of USAEurope Japan and Australia

Export of domestic drugs and pharmaceutical from 2003-04 to 2008-09are given in table below

Table 11 Growth rate of Domestic Indian marketSno Domestic Indian

market(figure in ` crore)

Growth Rate()

2003-04 32575 7282004-05 34128 4772005-06 39989 17172006-07 45369 13452007-08 50946 12302008-09 55454 885

Pharmaceutical Export Promotion Council (Pharmexcil)

The Department had played a pivotal role in the formation ofPharmexcil consequent to the recommendation from 9th Five Year AnnualPlan Working Group Report on Drugs and Pharmaceutical In the light of thisthe Department constantly interacts with Pharmexcil in their work areas Therole of Pharmexcil is for facilitation of exports of Drugs PharmaceuticalBiotechnology products Herbal medicines and Diagnostics to name a few Itis authorized to issue Registration-cum-Membership Certificate (RCMC) whichis one of the requirements for the importers and exporters of commodities Inaddition to this Pharmexcil is concerned with giving export thrust to thevarious products through visits of delegations to various markets abroadorganizing of seminars workshops and exhibitions As a major area of workPharmexcil also holds BuyersSellers meets and compiles detailed data base on pharmaceutical exports and problems in exporting pharmaceutical groupproducts of Pharmaceutical

Top 20 destinations of Indian Pharmaceutical productsduring 2008-09

S No Importing country

2008-09 (figure in` Crore)

1 USA 7103272 Russia 1519203 Germany 1441874 Austria 1417155 UK 1233096 South Africa 1126757 Canada 1090438 Brazil 1018899 Nigeria 10017410 Ukraine 6872211 Israel 6862212 Netherlands 6699813 Spain 6200214 Turkey 6142015 China 5615316 Kenya 5438617 Vietnam 5366218 Belgium 5209019 Italy 578520 Mexico 50154

Source Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

INDUSTRY SCENARIO

The Indian pharmaceutical industry currently tops the chart amongst Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology A highly organized sector the Indian pharmaceuticalindustry is estimated to be worth $ 45 billion growing at about 8 to 9 percent annually It ranks very high amongst all the third world countries in terms of technology quality and the vast range of medicines that are manufactured It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds almost every type of medicine is now made in the Indian pharmaceutical industry The Indian pharmaceutical sector is highly fragmented with more than 20000 registered units It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

1048729 Legal and Financial Framework India is a democraticcountry with a solid legal framework and strong financialmarkets There is already an established international industryand business community1048729 Information and Technology It has a good network ofworld-class educational institutions and established strengths inInformation Technology1048729 Globalization The country is committed to a free marketeconomy and globalization Above all it has a 70 million middleclass market which is constantly growing

Fig 8 Significant developments across the value chain during thelast decade

started taking place in the Indian pharmaceutical industry as well

ConsolidationAfter many years the international pharmaceutical industry hasdiscovered great opportunities in India The process of consolidation whichhas become a popular phenomenon in the world pharmaceutical industry hasstarted taking place in the Indian pharmaceutical industry as well

India is gaining importance as a manufacturer of pharmaceuticalBetween 1996 and 2006 sales of pharmaceutical were up by 9 per annumand thus expanded much faster than the global pharmaceutical market as awhole Demand in India is growing markedly due to rising population figuresthe increasing number aging population and the development of incomes

Medical TourismThe concept of medical tourism is an age old concept In this digitalera half a million people travel across the globe for health purposes Peoplefrom developed and affluent countries are moving out of their own countriesto other destinations seeking solitude natural and holistic remedies and ecofriendly experiences Medical Tourism is one such new area that is ripe withpotential

1048729 Medical travel When an individual travel across the border andoutside onersquos customary environment to seek healthcare services

1048729 Medical Tourist Upon arrival such an individual is called amedical tourist

1048729 Medical Tourism Traveling to a destination in another country toreceive medical dental and surgical care because the destinationenables better access to care provides higher quality care or offersthe same treatment at a more affordable price

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example some

centers will focus strongly on the heart surgery while others will deal withjoint replacement

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example somecenters will focus strongly on the heart surgery while others will deal with

joint replacement

Medical tourism is actively promoted by the governmentrsquos officialpolicy Indiarsquos National health policy 2002 for example says ldquoTo capitalizeon the comparative cost advantage enjoyed by domestic health facilities inthe secondary and tertiary sector the policy will encourage the supply ofservices to patients of foreign origin on payment The rendering of suchservices on payment in foreign exchange will be treated as lsquodeemed exportsrsquoand will be made eligible for all fiscal incentives extended to export earnings

Best hospitals for medical tourism in India The list is not exhaustivebut illustrative

1) Apollo Hospital Chennai2) Indraprashta Apollo Hospitals New Delhi3) Escorts heart Institute and Research Centre New Delhi4) Max Super Specialty Hospital New Delhi5) Wockhardt Hospital and Kidney Institute Kolkata

Indiarsquos strengths in Medical Tourism

1048729 Indian medical centers provide services that are in fact uncommonelsewhere

1048729 World-class treatment at competitive prices is available

1048729 Availability of skills knowledge and resources

1048729 Indiarsquos quality of care is world class competing with any otherindustrialized country

1048729 Indianism With Ayurveda becoming increasingly popular across theglobe this ancient Indian therapy can be used as a non-surgicaltreatment for various ailments along with the meditation and yogaThis gives the touch of Indianism to the treatment

1048729 The diversity of tourist destinations availability Leisure tourism isalready very much in demand in India as the country offers diversecultural and scenic beauty India has almost all sort of destinationslike high mountains vast deserts scenic beaches historicalmonuments and religious temples etc known for its hospitality fortourists

Medical tourism in India is growing at a rate of 30 percent per per year Itis estimated that India will earn US$ 22 Billion a year through medical tourism by 2012

PENETRATION IN THE WORLD MARKET

Exports

The Domestic pharmaceutical sector has been expanding and has isestimated at US$ 1172 billion (` 55454 crore) in 2008-09 from US$ 688billion (` 32575 crore) in 2003-04 Indian exports are destined to variouscountries around the globe including highly regulated markets of USAEurope Japan and Australia

Export of domestic drugs and pharmaceutical from 2003-04 to 2008-09are given in table below

Table 11 Growth rate of Domestic Indian marketSno Domestic Indian

market(figure in ` crore)

Growth Rate()

2003-04 32575 7282004-05 34128 4772005-06 39989 17172006-07 45369 13452007-08 50946 12302008-09 55454 885

Pharmaceutical Export Promotion Council (Pharmexcil)

The Department had played a pivotal role in the formation ofPharmexcil consequent to the recommendation from 9th Five Year AnnualPlan Working Group Report on Drugs and Pharmaceutical In the light of thisthe Department constantly interacts with Pharmexcil in their work areas Therole of Pharmexcil is for facilitation of exports of Drugs PharmaceuticalBiotechnology products Herbal medicines and Diagnostics to name a few Itis authorized to issue Registration-cum-Membership Certificate (RCMC) whichis one of the requirements for the importers and exporters of commodities Inaddition to this Pharmexcil is concerned with giving export thrust to thevarious products through visits of delegations to various markets abroadorganizing of seminars workshops and exhibitions As a major area of workPharmexcil also holds BuyersSellers meets and compiles detailed data base on pharmaceutical exports and problems in exporting pharmaceutical groupproducts of Pharmaceutical

Top 20 destinations of Indian Pharmaceutical productsduring 2008-09

S No Importing country

2008-09 (figure in` Crore)

1 USA 7103272 Russia 1519203 Germany 1441874 Austria 1417155 UK 1233096 South Africa 1126757 Canada 1090438 Brazil 1018899 Nigeria 10017410 Ukraine 6872211 Israel 6862212 Netherlands 6699813 Spain 6200214 Turkey 6142015 China 5615316 Kenya 5438617 Vietnam 5366218 Belgium 5209019 Italy 578520 Mexico 50154

Source Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

INDUSTRY SCENARIO

The Indian pharmaceutical industry currently tops the chart amongst Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology A highly organized sector the Indian pharmaceuticalindustry is estimated to be worth $ 45 billion growing at about 8 to 9 percent annually It ranks very high amongst all the third world countries in terms of technology quality and the vast range of medicines that are manufactured It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds almost every type of medicine is now made in the Indian pharmaceutical industry The Indian pharmaceutical sector is highly fragmented with more than 20000 registered units It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

India is gaining importance as a manufacturer of pharmaceuticalBetween 1996 and 2006 sales of pharmaceutical were up by 9 per annumand thus expanded much faster than the global pharmaceutical market as awhole Demand in India is growing markedly due to rising population figuresthe increasing number aging population and the development of incomes

Medical TourismThe concept of medical tourism is an age old concept In this digitalera half a million people travel across the globe for health purposes Peoplefrom developed and affluent countries are moving out of their own countriesto other destinations seeking solitude natural and holistic remedies and ecofriendly experiences Medical Tourism is one such new area that is ripe withpotential

1048729 Medical travel When an individual travel across the border andoutside onersquos customary environment to seek healthcare services

1048729 Medical Tourist Upon arrival such an individual is called amedical tourist

1048729 Medical Tourism Traveling to a destination in another country toreceive medical dental and surgical care because the destinationenables better access to care provides higher quality care or offersthe same treatment at a more affordable price

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example some

centers will focus strongly on the heart surgery while others will deal withjoint replacement

India is economical medical tourism hub major or minor and is equalto the major hubs in terms of quality of staff and equipment Prices averageat a fifth of the United States with particular deals in dentistry and diagnosticimaging which approach a tenth the price India deals with a higherproportion of major surgery tourists than minor surgery and check up touriststhan the other major hubs which has given rise to specialist hospitals acrossIndia These hospitals are far out of the reach of most Indians and caterspecifically to foreign tourists for very specific needs ndash for example somecenters will focus strongly on the heart surgery while others will deal with

joint replacement

Medical tourism is actively promoted by the governmentrsquos officialpolicy Indiarsquos National health policy 2002 for example says ldquoTo capitalizeon the comparative cost advantage enjoyed by domestic health facilities inthe secondary and tertiary sector the policy will encourage the supply ofservices to patients of foreign origin on payment The rendering of suchservices on payment in foreign exchange will be treated as lsquodeemed exportsrsquoand will be made eligible for all fiscal incentives extended to export earnings

Best hospitals for medical tourism in India The list is not exhaustivebut illustrative

1) Apollo Hospital Chennai2) Indraprashta Apollo Hospitals New Delhi3) Escorts heart Institute and Research Centre New Delhi4) Max Super Specialty Hospital New Delhi5) Wockhardt Hospital and Kidney Institute Kolkata

Indiarsquos strengths in Medical Tourism

1048729 Indian medical centers provide services that are in fact uncommonelsewhere

1048729 World-class treatment at competitive prices is available

1048729 Availability of skills knowledge and resources

1048729 Indiarsquos quality of care is world class competing with any otherindustrialized country

1048729 Indianism With Ayurveda becoming increasingly popular across theglobe this ancient Indian therapy can be used as a non-surgicaltreatment for various ailments along with the meditation and yogaThis gives the touch of Indianism to the treatment

1048729 The diversity of tourist destinations availability Leisure tourism isalready very much in demand in India as the country offers diversecultural and scenic beauty India has almost all sort of destinationslike high mountains vast deserts scenic beaches historicalmonuments and religious temples etc known for its hospitality fortourists

Medical tourism in India is growing at a rate of 30 percent per per year Itis estimated that India will earn US$ 22 Billion a year through medical tourism by 2012

PENETRATION IN THE WORLD MARKET

Exports

The Domestic pharmaceutical sector has been expanding and has isestimated at US$ 1172 billion (` 55454 crore) in 2008-09 from US$ 688billion (` 32575 crore) in 2003-04 Indian exports are destined to variouscountries around the globe including highly regulated markets of USAEurope Japan and Australia

Export of domestic drugs and pharmaceutical from 2003-04 to 2008-09are given in table below

Table 11 Growth rate of Domestic Indian marketSno Domestic Indian

market(figure in ` crore)

Growth Rate()

2003-04 32575 7282004-05 34128 4772005-06 39989 17172006-07 45369 13452007-08 50946 12302008-09 55454 885

Pharmaceutical Export Promotion Council (Pharmexcil)

The Department had played a pivotal role in the formation ofPharmexcil consequent to the recommendation from 9th Five Year AnnualPlan Working Group Report on Drugs and Pharmaceutical In the light of thisthe Department constantly interacts with Pharmexcil in their work areas Therole of Pharmexcil is for facilitation of exports of Drugs PharmaceuticalBiotechnology products Herbal medicines and Diagnostics to name a few Itis authorized to issue Registration-cum-Membership Certificate (RCMC) whichis one of the requirements for the importers and exporters of commodities Inaddition to this Pharmexcil is concerned with giving export thrust to thevarious products through visits of delegations to various markets abroadorganizing of seminars workshops and exhibitions As a major area of workPharmexcil also holds BuyersSellers meets and compiles detailed data base on pharmaceutical exports and problems in exporting pharmaceutical groupproducts of Pharmaceutical

Top 20 destinations of Indian Pharmaceutical productsduring 2008-09

S No Importing country

2008-09 (figure in` Crore)

1 USA 7103272 Russia 1519203 Germany 1441874 Austria 1417155 UK 1233096 South Africa 1126757 Canada 1090438 Brazil 1018899 Nigeria 10017410 Ukraine 6872211 Israel 6862212 Netherlands 6699813 Spain 6200214 Turkey 6142015 China 5615316 Kenya 5438617 Vietnam 5366218 Belgium 5209019 Italy 578520 Mexico 50154

Source Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

INDUSTRY SCENARIO

The Indian pharmaceutical industry currently tops the chart amongst Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology A highly organized sector the Indian pharmaceuticalindustry is estimated to be worth $ 45 billion growing at about 8 to 9 percent annually It ranks very high amongst all the third world countries in terms of technology quality and the vast range of medicines that are manufactured It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds almost every type of medicine is now made in the Indian pharmaceutical industry The Indian pharmaceutical sector is highly fragmented with more than 20000 registered units It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

joint replacement

Medical tourism is actively promoted by the governmentrsquos officialpolicy Indiarsquos National health policy 2002 for example says ldquoTo capitalizeon the comparative cost advantage enjoyed by domestic health facilities inthe secondary and tertiary sector the policy will encourage the supply ofservices to patients of foreign origin on payment The rendering of suchservices on payment in foreign exchange will be treated as lsquodeemed exportsrsquoand will be made eligible for all fiscal incentives extended to export earnings

Best hospitals for medical tourism in India The list is not exhaustivebut illustrative

1) Apollo Hospital Chennai2) Indraprashta Apollo Hospitals New Delhi3) Escorts heart Institute and Research Centre New Delhi4) Max Super Specialty Hospital New Delhi5) Wockhardt Hospital and Kidney Institute Kolkata

Indiarsquos strengths in Medical Tourism

1048729 Indian medical centers provide services that are in fact uncommonelsewhere

1048729 World-class treatment at competitive prices is available

1048729 Availability of skills knowledge and resources

1048729 Indiarsquos quality of care is world class competing with any otherindustrialized country

1048729 Indianism With Ayurveda becoming increasingly popular across theglobe this ancient Indian therapy can be used as a non-surgicaltreatment for various ailments along with the meditation and yogaThis gives the touch of Indianism to the treatment

1048729 The diversity of tourist destinations availability Leisure tourism isalready very much in demand in India as the country offers diversecultural and scenic beauty India has almost all sort of destinationslike high mountains vast deserts scenic beaches historicalmonuments and religious temples etc known for its hospitality fortourists

Medical tourism in India is growing at a rate of 30 percent per per year Itis estimated that India will earn US$ 22 Billion a year through medical tourism by 2012

PENETRATION IN THE WORLD MARKET

Exports

The Domestic pharmaceutical sector has been expanding and has isestimated at US$ 1172 billion (` 55454 crore) in 2008-09 from US$ 688billion (` 32575 crore) in 2003-04 Indian exports are destined to variouscountries around the globe including highly regulated markets of USAEurope Japan and Australia

Export of domestic drugs and pharmaceutical from 2003-04 to 2008-09are given in table below

Table 11 Growth rate of Domestic Indian marketSno Domestic Indian

market(figure in ` crore)

Growth Rate()

2003-04 32575 7282004-05 34128 4772005-06 39989 17172006-07 45369 13452007-08 50946 12302008-09 55454 885

Pharmaceutical Export Promotion Council (Pharmexcil)

The Department had played a pivotal role in the formation ofPharmexcil consequent to the recommendation from 9th Five Year AnnualPlan Working Group Report on Drugs and Pharmaceutical In the light of thisthe Department constantly interacts with Pharmexcil in their work areas Therole of Pharmexcil is for facilitation of exports of Drugs PharmaceuticalBiotechnology products Herbal medicines and Diagnostics to name a few Itis authorized to issue Registration-cum-Membership Certificate (RCMC) whichis one of the requirements for the importers and exporters of commodities Inaddition to this Pharmexcil is concerned with giving export thrust to thevarious products through visits of delegations to various markets abroadorganizing of seminars workshops and exhibitions As a major area of workPharmexcil also holds BuyersSellers meets and compiles detailed data base on pharmaceutical exports and problems in exporting pharmaceutical groupproducts of Pharmaceutical

Top 20 destinations of Indian Pharmaceutical productsduring 2008-09

S No Importing country

2008-09 (figure in` Crore)

1 USA 7103272 Russia 1519203 Germany 1441874 Austria 1417155 UK 1233096 South Africa 1126757 Canada 1090438 Brazil 1018899 Nigeria 10017410 Ukraine 6872211 Israel 6862212 Netherlands 6699813 Spain 6200214 Turkey 6142015 China 5615316 Kenya 5438617 Vietnam 5366218 Belgium 5209019 Italy 578520 Mexico 50154

Source Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

INDUSTRY SCENARIO

The Indian pharmaceutical industry currently tops the chart amongst Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology A highly organized sector the Indian pharmaceuticalindustry is estimated to be worth $ 45 billion growing at about 8 to 9 percent annually It ranks very high amongst all the third world countries in terms of technology quality and the vast range of medicines that are manufactured It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds almost every type of medicine is now made in the Indian pharmaceutical industry The Indian pharmaceutical sector is highly fragmented with more than 20000 registered units It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

Exports

The Domestic pharmaceutical sector has been expanding and has isestimated at US$ 1172 billion (` 55454 crore) in 2008-09 from US$ 688billion (` 32575 crore) in 2003-04 Indian exports are destined to variouscountries around the globe including highly regulated markets of USAEurope Japan and Australia

Export of domestic drugs and pharmaceutical from 2003-04 to 2008-09are given in table below

Table 11 Growth rate of Domestic Indian marketSno Domestic Indian

market(figure in ` crore)

Growth Rate()

2003-04 32575 7282004-05 34128 4772005-06 39989 17172006-07 45369 13452007-08 50946 12302008-09 55454 885

Pharmaceutical Export Promotion Council (Pharmexcil)

The Department had played a pivotal role in the formation ofPharmexcil consequent to the recommendation from 9th Five Year AnnualPlan Working Group Report on Drugs and Pharmaceutical In the light of thisthe Department constantly interacts with Pharmexcil in their work areas Therole of Pharmexcil is for facilitation of exports of Drugs PharmaceuticalBiotechnology products Herbal medicines and Diagnostics to name a few Itis authorized to issue Registration-cum-Membership Certificate (RCMC) whichis one of the requirements for the importers and exporters of commodities Inaddition to this Pharmexcil is concerned with giving export thrust to thevarious products through visits of delegations to various markets abroadorganizing of seminars workshops and exhibitions As a major area of workPharmexcil also holds BuyersSellers meets and compiles detailed data base on pharmaceutical exports and problems in exporting pharmaceutical groupproducts of Pharmaceutical

Top 20 destinations of Indian Pharmaceutical productsduring 2008-09

S No Importing country

2008-09 (figure in` Crore)

1 USA 7103272 Russia 1519203 Germany 1441874 Austria 1417155 UK 1233096 South Africa 1126757 Canada 1090438 Brazil 1018899 Nigeria 10017410 Ukraine 6872211 Israel 6862212 Netherlands 6699813 Spain 6200214 Turkey 6142015 China 5615316 Kenya 5438617 Vietnam 5366218 Belgium 5209019 Italy 578520 Mexico 50154

Source Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

INDUSTRY SCENARIO

The Indian pharmaceutical industry currently tops the chart amongst Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology A highly organized sector the Indian pharmaceuticalindustry is estimated to be worth $ 45 billion growing at about 8 to 9 percent annually It ranks very high amongst all the third world countries in terms of technology quality and the vast range of medicines that are manufactured It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds almost every type of medicine is now made in the Indian pharmaceutical industry The Indian pharmaceutical sector is highly fragmented with more than 20000 registered units It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

S No Importing country

2008-09 (figure in` Crore)

1 USA 7103272 Russia 1519203 Germany 1441874 Austria 1417155 UK 1233096 South Africa 1126757 Canada 1090438 Brazil 1018899 Nigeria 10017410 Ukraine 6872211 Israel 6862212 Netherlands 6699813 Spain 6200214 Turkey 6142015 China 5615316 Kenya 5438617 Vietnam 5366218 Belgium 5209019 Italy 578520 Mexico 50154

Source Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

INDUSTRY SCENARIO

The Indian pharmaceutical industry currently tops the chart amongst Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology A highly organized sector the Indian pharmaceuticalindustry is estimated to be worth $ 45 billion growing at about 8 to 9 percent annually It ranks very high amongst all the third world countries in terms of technology quality and the vast range of medicines that are manufactured It ranges from simple headache pills to sophisticated antibiotics and complex cardiac compounds almost every type of medicine is now made in the Indian pharmaceutical industry The Indian pharmaceutical sector is highly fragmented with more than 20000 registered units It has expanded drastically in the last two decades The Pharmaceutical and Chemical industry in

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

India is an extremely fragmented market with severe price competition and government price control The Pharmaceutical industry in India meets around 70 of the countrys demand for bulk drugs drug intermediates pharmaceutical formulations chemicals tablets capsules orals and injectibles There are approximately 250 large units and about 8000 Small Scale Units which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units)

The Government has also played a vital role in the development of the India Software Industry In 1986 the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme In addition to attract foreign direct investment the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products

Current Scenario Indian pharmaceutical industry is expected to grow at 19 in 2013India is now among the top five pharmaceutical emerging marketsThere will be new drug launches new drug filings and Phase II clinic trials throughout the yearOn back of increasing sales of generic medicines continued growth in chronic therapies and a greater penetration in rural markets the domestic pharmaceutical market is expected to register a strong double-digit growth of 13-14 per cent in 2013 Moreover the increasing population of the higher-income group in the country will open a potential US$ 8 billion market for multinational companies selling costly drugs by 2015 Besides the domestic pharma market is estimated to touch US$ 20 billion by 2015 making India a lucrative destination for clinical trials for global giants Further estimates the healthcare market in India to reach US$ 3159 billion by 2020

Growth of Import-Export

Imports-As per the Directorate General of Commercial Intelligence and Statistics(DGCIS) Kolkata the value of imports of ldquoMedicinal and Pharmaceuticals Productsrdquo for the latest period 2007-08 to 2010-11 is as under

year Value of import of ldquoMedicinal and

Growth

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

pharmaceuticals productsrdquo

2007-08 6734 14792008-09 8649 28432009-10 9959 15152010-11 10937 982

Exports - As Per DGCIS Kolkata Exports of ldquoDrugs and Pharmaceuticals and Fine Chemicalsrdquo for the period 2007-08 to 2010-11 are below

year Value of import of ldquoMedicinal and pharmaceuticals productsrdquo

Growth

2007-08 29354 14372008-09 39821 35662009-10 42456 6622010-11 47551 1200

GLOBAL SCENARIO

1 SAVA GLOBAL Indian Pharma Industry ndash Current Scenario

2 Indian pharmaceutical companies will experience a windfall due to falling Rupee amp Obamacare Contradictory to some industries the rupee depreciation is a much delight to the pharmaceutical industry In India This is because the export oriented Indian pharmaceutical firms will get more rupees in return of every dollar that they earn However the Indian currency that has fallen 15 since May this year is expected to show losses as well as gain The Indian pharma industry is moving towards Specialty generic drugs and this will lead to better price realization

3 The president of United States Barack Obamarsquos healthcare plan known as Obamacare aims at making medical treatments affordable to every American This puts the Indian pharma industry in a happy place as it sees a boost in its growth especially for the Indian drug exporter This scope for growth also brings the demand for high quality due to the increasing number of United States FDA audits although exports may be cheaper due to the decline of Indian rupee Every pharma manufacturing company in India including SAVA Global is well aware of this and is taking measures where there will be zero tolerance towards any such thing that is against the US FDA norms Drug makers are trying hard to attain a balance between exposures and hedge by adopting as well as in the building calibrated approach

4 As per the current status pharmaceutical drugs exporter in India exports to more than 220 countries in the world which includes Russia Singapore Kenya and Brazil As per expert 10 till 2015

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO

5 ldquoIt is expected that the Indian pharma industry as well as Indian pharmaceutical exporter will experience a profitable scenario in their growth in the coming yearsrdquo

6 SAVA Global is well poised to meet this market volatility and garner larger business profits in the coming years from its burgeoning exports to the target countries including Russia Singapore Kenya Europe etc Note The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only Sava Global or its affiliates bear no responsibility on the authenticity of the information published herein

MARKET SCENARIO